Baltic Horizon Fund Consolidated

News Desk 2022 · 2019-02-15T08:15:17-05:00

Baltic Horizon Fund Consolidated Un-Audited Results for Q4 2018 Gross Asset Value (GAV) As at 31 December 2018, the GAV was EUR 260.9 million (EUR 248.6 million as at 30 September 2018). During Q4 2018, the Group completed subsequent subscription for its 5-year unsecured notes (bonds) worth EUR 10 million. Net Asset Value (NAV) In Q4 2018, the Fund NAV increased from EUR 109.3 million to EUR 109.8 million. Equity was positively affected by the Fund’s operational performance over the quarter, however, this was offset by a EUR 2.04 million cash distribution to its unitholders (EUR 0.026 per unit) and a buy-back of own units. Net Operating Income (NOI) and Net Profit In Q4 2018, the Fund NOI was EUR 3.9 million (EUR 2.9 million in Q4 2017), net profit was EUR 3.5 million (EUR 5.3 million in Q4 2017). Growth in NOI was positively affected by the new property acquisitions (Vainodes I office building, Postimaja shopping centre and LNK Centre). During the quarter, the Fund recorded a fair value gain of EUR 1.5 million whereas the fair value gain in Q4 2017 was EUR 3.3 million. Cash Distributions (dividends) On 13 February 2019, the Fund declared a cash distribution of EUR 2,119 thousand (EUR 0.027 per unit) to the Fund unitholders for Q4 2018 results (EUR 2,044 thousand or EUR 0.026 per unit for Q3 2018). During Q4 2018, the Generated Net Cash Flow (GNCF) amounted to EUR 2,204 thousand or EUR 0.028 per unit (EUR 2,067 thousand or EUR 0.026 per unit for Q3 2018). Quarterly Key Figures Euro ‘000Q4 2018Q4 2017Change (%) Net rental income3,9292,92234.5%Valuation gains / (loss) on investment properties1,5343,337(54.0%)Operating profit4,6855,357(12.5%)Net financing costs(806)(403)100%Profit before tax3,8794,954(21.7%)Net profit for the period3,535 5,277(33.0%) Weighted average number of units outstanding78,637,645*69,011,12113.9%Earnings per unit (EUR)0.04 0.08(50%) Euro ‘00031.12.201831.12.2017Change (%) Investment property in use245,160189,31729.5%Gross asset value (GAV)260,878215,78520.9% Interest bearing loans140,50798,08743.2%Total liabilities151,073108,80938.8% Net asset value (NAV)109,805106,9762.6%Number of units outstanding78,496,831*77,440,6381.4%Net asset value (NAV) per unit (EUR)1.3988 1.38141.3%Loan-to-value ratio (LTV)57.3%51.8% Average effective interest rate2.4%1.7% *The number of units excludes 255,969 units purchased by the Fund as part of the units buy-back program. Investment properties PERFORMANCE in Q4 2018 During Q4 2018, the average actual occupancy of the portfolio was 98.2% (Q3 2018: 97.5%). When all rental guarantees are considered, the effective occupancy rate is 98.6% (Q3 2018: 97.8%). The average direct property yield during Q4 2018 was 6.8% (Q3 2018: 6.9%). The net initial yield for the whole portfolio for Q4 2018 was 6.5% (Q3 2018: 6.6%). Property nameCityCountryBook value1 Euro‘000NLADirect property yield2Net initial yield3Occupancy rate for Q4 2018Duetto IVilniusLithuania16,3208,4986.7%6.1%100.0%4Pirita SCTallinnEstonia10,0205,4277.4%9.0%100.0%4Upmalas Biroji BCRigaLatvia25,73010,4587.3%6.7%100.0%G4S HeadquartersTallinnEstonia17,2409,1797.7%6.9%100.0%Europa SCVilniusLithuania41,10016,8566.3%5.7%95.6%Domus Pro Retail ParkVilniusLithuania17,46011,2477.2%6.5%98.4%Domus Pro OfficeVilniusLithuania7,4604,8318.2%7.1%98.4%MerakiVilniusLithuania1,670- ---Sky SCRigaLatvia5,3903,2548.1%7.5%99.4%LinconaTallinnEstonia17,17010,8708.1%7.4%98.5%Vainodes IRigaLatvia21,2308,0526.8%6.8%100.0%Postimaja CC Plaza complexTallinnEstonia46,92017,8095.9%5.8%97.9%LNK CentreRigaLatvia17,4507,4536.3%6.3%100.0%Total portfolio 245,160113,9346.8%6.5%98.6% Based on the latest valuation as at 28 December 2018.Direct property yield (DPY) is calculated by dividing NOI by the acquisition value and subsequent capital expenditure of the property.The net initial yield (NIY) is calculated by dividing NOI by the market value of the property.Effective occupancy rate is 100% due to a rental guarantee. STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME Euro ‘00001.10.2018-31.12.201801.10.2017-31.12.2017 (restated)*01.01.2018-31.12.201801.01.2017-31.12.2017 (restated)* Rental income4,2843,21715,86011,839Service charge income9487562,7601,921Cost of rental activities(1,303)(1,051)(3,816)(2,992)Net rental income3,929 2,92214,80410,768 Administrative expenses(804)(839)(2,813)(2,774)Other operating income / (expenses)26(63)7414Valuation gains / (loss) on investment properties1,5343,3372,0143,676Operating profit4,685 5,35714,079 11,684 Financial income22847Financial expenses(808)(405)(2,789)(1,528)Net financing costs(806)(403)(2,781)(1,481) Profit before tax3,879 4,95411,29810,203Income tax charge(344)323(1,308)(759)Profit for the period3,535 5,2779,990 9,444 Other comprehensive income that is or may be reclassified to profit or loss in subsequent periodsNet gains (losses) on cash flow hedges(588)147(1,013)273Termination of interest rate swap agreement---57Recognition of initial interest rate cap costs-(43)(33)(43)Income tax relating to net gains (losses) on cash flow hedges55(17)97(49)Other comprehensive income/ (expense), net of tax, that is or may be reclassified to profit or loss in subsequent periods(533)87(949)238 Total comprehensive income for the period, net of tax3,0025,3649,041 9,682 Basic and diluted earnings per unit (Euro)0.04 0.08 0.13 0.15 *In 2018, the Group adopted IFRS 15 Revenue from Contracts with Customers, effective 1 January 2018. As a result, the comparative figures for “service charge income” and “cost of rental activities” were adjusted. The adjustment did not have an impact on the Group’s equity. The impact is related to presentation changes in accordance with IFRS 15. CONSOLIDATED STATEMENT OF FINANCIAL POSITION Euro ‘00031.12.201831.12.2017 Non-current assets Investment properties245,160189,317Derivative financial instruments989Other non-current assets596146Total non-current assets245,765189,552 Current assets Trade and other receivables2,7341,568Prepayments154108Cash and cash equivalents12,22524,557Total current assets15,11326,233Total assets260,878215,785 Equity Paid in capital93,67391,848Own units(335)-Cash flow hedge reserve(1,005)(56)Retained earnings17,47215,184Total equity109,805 106,976 Non-current liabilities Interest bearing loans and borrowings140,40196,497Deferred tax liabilities5,8445,206Derivative financial instruments1,06988Other non-current liabilities905859Total non-current liabilities148,219 102,650 Current liabilities Interest bearing loans and borrowings1061,590Trade and other payables2,3974,202Income tax payable-14Derivative financial instruments-15Other current liabilities351338Total current liabilities2,854 6,159Total liabilities151,073 108,809Total equity and liabilities260,878 215,785 For additional information please contact: Tarmo Karotam Baltic Horizon Fund manager E-mail tarmo.karotam@nh-cap.com www.baltichorizon.com Baltic Horizon Fund is a registered contractual public closed-end real estate fund managed by Alternative Investment Fund Manager license holder Northern Horizon Capital AS. Distribution: Nasdaq Tallinn, Nasdaq Stockholm, GlobeNewswire, www.baltichorizon.com This announcement contains information that the Management Company is obliged to disclose pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the above distributors, at 14:23 EET on 15 February 2019. Attachment BHF quarterly report Q4 2018

Gross Asset Value (GAV) As at 31 December 2018, the GAV was EUR 260.9 million (EUR 248.6 million as at 30 September 2018). During Q4 2018, the Group completed subsequent subscription for its 5-year unsecured notes (bonds) worth EUR 10 million. Net Asset Value (NAV) In Q4 2018, the Fund NAV increased from EUR 109.3 million to EUR 109.8 million. Equity was positively affected by the Fund’s operational performance over the quarter, however, this was offset by a EUR 2.04 million cash distribution to its unitholders (EUR 0.026 per unit) and a buy-back of own units.

Net Operating Income (NOI) and Net Profit In Q4 2018, the Fund NOI was EUR 3.9 million (EUR 2.9 million in Q4 2017), net profit was EUR 3.5 million (EUR 5.3 million in Q4 2017). Growth in NOI was positively affected by the new property acquisitions (Vainodes I office building, Postimaja shopping centre and LNK Centre). During the quarter, the Fund recorded a fair value gain of EUR 1.5 million whereas the fair value gain in Q4 2017 was EUR 3.3 million.

Cash Distributions (dividends) On 13 February 2019, the Fund declared a cash distribution of EUR 2,119 thousand (EUR 0.027 per unit) to the Fund unitholders for Q4 2018 results (EUR 2,044 thousand or EUR 0.026 per unit for Q3 2018). During Q4 2018, the Generated Net Cash Flow (GNCF) amounted to EUR 2,204 thousand or EUR 0.028 per unit (EUR 2,067 thousand or EUR 0.026 per unit for Q3 2018). Quarterly Key Figures

Euro ‘000	Q4 2018	Q4 2017	Change (%)

Net rental income	3,929	2,922	34.5%
Valuation gains / (loss) on investment properties	1,534	3,337	(54.0%)
Operating profit	4,685	5,357	(12.5%)
Net financing costs	(806)	(403)	100%
Profit before tax	3,879	4,954	(21.7%)
Net profit for the period	3,535	5,277	(33.0%)

Weighted average number of units outstanding	78,637,645*	69,011,121	13.9%
Earnings per unit (EUR)	0.04	0.08	(50%)

Euro ‘000	31.12.2018	31.12.2017	Change (%)

Investment property in use	245,160	189,317	29.5%
Gross asset value (GAV)	260,878	215,785	20.9%

Interest bearing loans	140,507	98,087	43.2%
Total liabilities	151,073	108,809	38.8%

Net asset value (NAV)	109,805	106,976	2.6%
Number of units outstanding	78,496,831*	77,440,638	1.4%
Net asset value (NAV) per unit (EUR)	1.3988	1.3814	1.3%
Loan-to-value ratio (LTV)	57.3%	51.8%
Average effective interest rate	2.4%	1.7%

*The number of units excludes 255,969 units purchased by the Fund as part of the units buy-back program.

Investment properties PERFORMANCE in Q4 2018

During Q4 2018, the average actual occupancy of the portfolio was 98.2% (Q3 2018: 97.5%). When all rental guarantees are considered, the effective occupancy rate is 98.6% (Q3 2018: 97.8%). The average direct property yield during Q4 2018 was 6.8% (Q3 2018: 6.9%). The net initial yield for the whole portfolio for Q4 2018 was 6.5% (Q3 2018: 6.6%).

Property name	City	Country	Book value¹ *Euro‘000*	NLA	Direct property yield²	Net initial yield³	Occupancy rate for Q4 2018
Duetto I	Vilnius	Lithuania	16,320	8,498	6.7%	6.1%	100.0%⁴
Pirita SC	Tallinn	Estonia	10,020	5,427	7.4%	9.0%	100.0%⁴
Upmalas Biroji BC	Riga	Latvia	25,730	10,458	7.3%	6.7%	100.0%
G4S Headquarters	Tallinn	Estonia	17,240	9,179	7.7%	6.9%	100.0%
Europa SC	Vilnius	Lithuania	41,100	16,856	6.3%	5.7%	95.6%
Domus Pro Retail Park	Vilnius	Lithuania	17,460	11,247	7.2%	6.5%	98.4%
Domus Pro Office	Vilnius	Lithuania	7,460	4,831	8.2%	7.1%	98.4%
Meraki	Vilnius	Lithuania	1,670	-	-	-	-
Sky SC	Riga	Latvia	5,390	3,254	8.1%	7.5%	99.4%
Lincona	Tallinn	Estonia	17,170	10,870	8.1%	7.4%	98.5%
Vainodes I	Riga	Latvia	21,230	8,052	6.8%	6.8%	100.0%
Postimaja & CC Plaza complex	Tallinn	Estonia	46,920	17,809	5.9%	5.8%	97.9%
LNK Centre	Riga	Latvia	17,450	7,453	6.3%	6.3%	100.0%
Total portfolio			245,160	113,934	6.8%	6.5%	98.6%

Based on the latest valuation as at 28 December 2018.
Direct property yield (DPY) is calculated by dividing NOI by the acquisition value and subsequent capital expenditure of the property.
The net initial yield (NIY) is calculated by dividing NOI by the market value of the property.
Effective occupancy rate is 100% due to a rental guarantee.

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

Euro ‘000	01.10.2018-31.12.2018	01.10.2017-31.12.2017 (restated)*	01.01.2018-31.12.2018	01.01.2017-31.12.2017 (restated)*

Rental income	4,284	3,217	15,860	11,839
Service charge income	948	756	2,760	1,921
Cost of rental activities	(1,303)	(1,051)	(3,816)	(2,992)
Net rental income	3,929	2,922	14,804	10,768

Administrative expenses	(804)	(839)	(2,813)	(2,774)
Other operating income / (expenses)	26	(63)	74	14
Valuation gains / (loss) on investment properties	1,534	3,337	2,014	3,676
Operating profit	4,685	5,357	14,079	11,684

Financial income	2	2	8	47
Financial expenses	(808)	(405)	(2,789)	(1,528)
Net financing costs	(806)	(403)	(2,781)	(1,481)

Profit before tax	3,879	4,954	11,298	10,203
Income tax charge	(344)	323	(1,308)	(759)
Profit for the period	3,535	5,277	9,990	9,444

Other comprehensive income that is or may be reclassified to profit or loss in subsequent periods
Net gains (losses) on cash flow hedges	(588)	147	(1,013)	273
Termination of interest rate swap agreement	-	-	-	57
Recognition of initial interest rate cap costs	-	(43)	(33)	(43)
Income tax relating to net gains (losses) on cash flow hedges	55	(17)	97	(49)
Other comprehensive income/ (expense), net of tax, that is or may be reclassified to profit or loss in subsequent periods	(533)	87	(949)	238

Total comprehensive income for the period, net of tax	3,002	5,364	9,041	9,682

Basic and diluted earnings per unit (Euro)	0.04	0.08	0.13	0.15

*In 2018, the Group adopted IFRS 15 Revenue from Contracts with Customers, effective 1 January 2018. As a result, the comparative figures for “service charge income” and “cost of rental activities” were adjusted. The adjustment did not have an impact on the Group’s equity. The impact is related to presentation changes in accordance with IFRS 15.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Euro ‘000	31.12.2018	31.12.2017

Non-current assets
Investment properties	245,160	189,317
Derivative financial instruments	9	89
Other non-current assets	596	146
Total non-current assets	245,765	189,552

Current assets
Trade and other receivables	2,734	1,568
Prepayments	154	108
Cash and cash equivalents	12,225	24,557
Total current assets	15,113	26,233
Total assets	260,878	215,785

Equity
Paid in capital	93,673	91,848
Own units	(335)	-
Cash flow hedge reserve	(1,005)	(56)
Retained earnings	17,472	15,184
Total equity	109,805	106,976

Non-current liabilities
Interest bearing loans and borrowings	140,401	96,497
Deferred tax liabilities	5,844	5,206
Derivative financial instruments	1,069	88
Other non-current liabilities	905	859
Total non-current liabilities	148,219	102,650

Current liabilities
Interest bearing loans and borrowings	106	1,590
Trade and other payables	2,397	4,202
Income tax payable	-	14
Derivative financial instruments	-	15
Other current liabilities	351	338
Total current liabilities	2,854	6,159
Total liabilities	151,073	108,809
Total equity and liabilities	260,878	215,785

For additional information please contact:

Tarmo Karotam Baltic Horizon Fund manager E-mail tarmo.karotam@nh-cap.com www.baltichorizon.com

Baltic Horizon Fund is a registered contractual public closed-end real estate fund managed by Alternative Investment Fund Manager license holder Northern Horizon Capital AS.

Distribution: Nasdaq Tallinn, Nasdaq Stockholm, GlobeNewswire, www.baltichorizon.com

This announcement contains information that the Management Company is obliged to disclose pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the above distributors, at 14:23 EET on 15 February 2019.

Attachment